Subject: End Wall Street's Game of 'Heads I Win, Tails You Lose' s7-12-11

May 27, 2011

Elizabeth Murphy
100 F Street, NE
Washington, DC 20549

Dear Murphy,

America paid a terrible economic price because of irresponsible
risk-taking by Wall Street executives. Those executives took those
risks because they knew that they could walk away with billions of
dollars in bonuses and stock options and never pay for the long-term
consequences of their actions. We need tough rules so that Wall Street
pay packages don't encourage short-term risk taking.

Your rules should
1) Require at least a five year deferral period for executive bonuses
at big banks, ban executive hedging of their pay packages, and require
specific details from banks on precisely how they ensure that
executives will share in the long-run risks created by their decisions.
It should apply to the full range of important financial institutions,
and draw in all the key executives at those companies.
2) Require big banks to prohibit executives from "hedging" their
compensation making side deals to get most of their money today and
get around the deferral rules. Research shows that executives who do
this are generally betting on future losses for their own company. A
well run bank should not allow this.
3) Not allow Wall Street to get away with narrative generalities about
how they've reduced incentives for risk taking. Require specific and
detailed reporting by banks on exactly how they ensure their
executives' salaries are on the line if the company performs badly in
the future.

Once this rule is passed, only you will know the details of its
enforcement. But it's important for the public to know the progress you
are making on this vital issue. You should report back to the public
annually with a detailed report on progress in creating accountability
for Wall Street pay.